Health Care Financial Management

Research Paper (15 pages, 30 References):

The purposes of this assignment are to help you a.) Effectively use research resources through library data bases and search engines to complete course requirements, b.) Improve your critical thinking skills, and c.) Develop your effectiveness in writing about topics relevant to course objectives and health care administration.

The paper is to explore, in greater detail than the required readings and class discussion, any health economics or finance topic identified in this course syllabus. Each student will choose a topic, which has relevance to health care financial management for a health service organization (HSO). Examples include but are not limited to the following: the financial impact of Medicare rates on a health service organization; the use of cost benefit analysis by a HSO; the use of market analysis and strategic product lines; or the change in the utilization of funds by an HSO.  The student will demonstrate his/her mastery of the selected topic in no more than 15 pages of text.

Once you have selected the topic,please upload a minimum one-half page write-up and brief outline on the proposed topic so that I can obtain approval from the professor.

Team Project – Cost Analysis* (8 pages, 16 References)

Team Project Description:

An equipment acquisition proposal was being considered by a large health care organization, XYZ Health Care. The array machine will enable the hospital to perform autoimmunity tests (for immunoglobulins G, M, and A and complements C3 and C4) in-house rather than sending them to a reference laboratory. Test turnaround time is expected to decrease by 2 days. The array machine costs $50,000, with a useful life of 5 years. The depreciation schedule will be $10,000/year.

The expected volume for tests is one of each of the five autoimmunity tests per day. Having the tests done by the reference laboratory costs the hospital an average of $10/test. The hospital’s average charge to patients is $20/test. If the array machine is acquired and the tests done in-house, the costs of reagents would average $2/test.

The array machine can run a maximum of 40 patient samples and perform 20 different tests on each sample every 2 hours. Except in extraordinary circumstances, tests would be run Monday thorough Saturday.

The machine requires approximately 1 hour of technician time (valued at $15/hour) each day to calibrate it, to conduct a test run for control purposes and to perform general maintenance. This is a fixed cost because it does not vary by volume. Technician setup time to run tests is negligible. Beyond the five autoimmunity tests the laboratory wants to perform in-house, the machine can also perform apolipoprotein cardiac profiles that are currently done on equipment in the clinical chemistry department. The array machine can provide a quantitative measure and not just the positive or negative indicator that the clinical chemistry department’s current equipment gives.

The CEO of XYZ Health Care has hired your team as consultants to answer the following questions:

  1. How many autoimmunity tests per year will have to be performed on the array machine to break even?
  2. Given the present volume of tests, would there be an annual net contribution and, if so, how much?
  3. If half of the patients have Medicare coverage (DRG reimbursement includes all tests), would the laboratory break even on the equipment? If not, should the equipment be acquired anyway?

Please create a professional written document including an executive summary that addresses the questions above.

If using a written Word Document:

-An executive summary is a great way to communicate in an efficient and concise manner what you’ve found out. Keep in mind, most people reading your work will be in a time crunch and will need a quick, one-page document to review.

-8-10 pages including charts.

-Use headings through-out

-The response should provide a rationale and discussion regarding each step you take.  Charts should be fully explained in the text.

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